Stock Dividends Video Lessons

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Problem: G Company had 50,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record this dividend is: a. Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $135,000. b. Debit Retained Earnings $135,000; credit Cash $135,000. c. Debit Retained Earnings $100,000; credit Common Stock Dividend Distributable $100,000. d. Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $100,000; credit Paid-In Capital in Excess of Par Value, Common Stock $35,000.

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Problem Details

G Company had 50,000 shares of $20 par value common stock outstanding on July 1. Later that day the board of directors declared a 10% stock dividend when the market value of each share was $27. The entry to record this dividend is:

a. Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $135,000.

b. Debit Retained Earnings $135,000; credit Cash $135,000.

c. Debit Retained Earnings $100,000; credit Common Stock Dividend Distributable $100,000.

d. Debit Retained Earnings $135,000; credit Common Stock Dividend Distributable $100,000; credit Paid-In Capital in Excess of Par Value, Common Stock $35,000.

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